practicequestions1spring2004a - Econ 102 Spring 2004...

Econ 102 Spring 2004 Practice Questions 1 I. Concepts: Opportunity cost Production Possibilities Frontiers (PPF) Absolute advantage Comparative advantage II. Questions: P1.The resource cost to produce fish and oil are listed below. Fish Oil Britain 30 10 Norway 60 30 Notice that the numbers in the table represent units of resource required to produce one ton of either fish or oil. For instance, Britain requires 30 units of resource to produce 1 ton of fish whereas Norway requires 60 units of resource to produce 1 ton of fish. Use the information in the table to answer the following questions. 1. Assume that each country has resources fixed at 120 units during the given time period. Fill in the table below with the maximum amount of fish or oil that Britain and Norway can produce from these resources. Fish Oil Britain Norway 2. What is the opportunity cost of producing 1 ton of fish in Britain? 3. What is the opportunity cost of producing 1 ton of fish in Norway? 4. Which country has an absolute advantage in the production of fish? 5. Which country has a comparative advantage in the production of fish? 6.

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